Washington got some good news this week. The state recovered $300 million that it had handed out to fraudulent unemployment claims. What regular Washingtonians don’t know is whether that’s all of the money. The public deserves a full accounting of the damage and a strategy to prevent it from happening again.
Officials in Gov. Jay Inslee’s administration, including those at the Employment Security Department, have been cagey about how badly crooks fleeced the state. When news first broke about the fraud, officials said losses were in the “hundreds of millions.” They’ve stuck to that imprecise answer. Maybe it’s $300 million. That would be incredible news seeing as it’s been returned. More likely, it’s more. Most likely, the state is still trying to figure out how much it lost.
Such vagueness is unacceptable. Washingtonians deserve to know how bad this scandal really is. Even if the state can’t cite a precise number, it ought to give people a better sense of where things stand and provide regular updates. Keeping people in the dark only creates even greater distrust that Olympia has things under control.
Transparency and honesty are especially important in this election year. Inslee is seeking re-election to a third term. Voters should know why a $44 million technology upgrade at ESD that was supposed to reduce fraud failed so spectacularly when it was needed most.
In some ways, the state set itself up for fraud; it just didn’t realize how bad it could get. The state’s unemployment system is built to handle a few thousand new claims per week. When Inslee shut the state down to try to slow the spread of COVID-19, the number of new claims exploded, reaching 182,000 in the worst week. Now more than a million workers have filed for jobless benefits. The unemployment rate in Spokane County reached 15.9 percent in April, the highest in three decades.
Political forces pressed to get assistance out as quickly as possible. That meant lowering some of the safeguards in the system to detect fraud. Officials balanced competing demands and made a decision to accomplish that goal. No one anticipated a coordinated scam from Nigeria to defraud the system.
Even so, as in-depth reporting by the Seattle Times found, officials missed early warning signs that could have stanched the flow of cash to thieves much sooner.
Worse off than the state are the Washington workers who are newly unemployed and struggle to obtain benefits because the state is scrambling to increase fraud protection. Some of those workers had their identities stolen by the scammers and now face extra scrutiny and bureaucratic mazes to correct things with the state.
The stress of a pandemic-induced economic shutdown revealed cracks in the state’s jobless claims system. It wasn’t the best way to discover such flaws, but it’s been tragically effective. Now it’s up to Inslee and the ESD to explain just how bad things are and what will be done to fix them: Demonstrate that you trust the public and are learning from your mistakes.
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